EU funds for Bulgaria - Dance It or Hate It

An advertising poster presenting twelve of the stars of popfolk music channel Planeta TV. Photo by Planeta TV

The Economist

"THE European Union funds will not be used for silicone breast implants."

This rather unorthodox promise probably is not what one would expect to hear from a company that has secured nearly €1m (.3m) in EU funding. And yet, it is precisely how Mitko Dimitrov, president of Payner Media, a Bulgarian broadcaster, had to defend his company's grant.The revelation that Payner, a record label and owner of three TV channels, has secured considerable funding under an EU competitiveness grant designed to support small and mid-size companies in the creative industries sparked an outcry in the Balkan country. The main reason lies in chalga, a type of music the company produces. Chalga is an eclectic mix of oriental, pop and dance styles featuring scantily dressed women and sexually explicit lyrics. It's also one of the most polarising issues in Bulgaria dividing the society along a "dance-it-or-hate-it" line.

It was the hate-it part that was more vociferous after the report last week. Mitko Novkov, a literary critic, asked "in which monstrous mind this was born" while Tedi Moskov, a theatre director, suggested the state should introduce a tax on chalga music. After journalists, politicians and social media users weighed in, mostly denouncing the fact that European money is spent on financing performers resembling porn stars singing about gangsters and money, the European Commission asked Bulgaria to open an investigation "in how far the rules of the grant scheme have been followed".

While the Bulgarian authorities were quick to assure that "from a formal point of view, everything is correct", when it comes to rules and EU grants, the Commission has grounds for suspicion, especially in times of continent-wide austerity. In 2008, it froze more than half a billion euros because of Bulgaria's corruption and poor management of EU funds.

Nevertheless, some observers defended the decision explaining that EU funding is allocated based on financial and economic criteria rather than on moral and cultural merits. According to Payner's president, the money would be used for new technical equipment and for boosting competitiveness thus creating at least 30 new jobs. After all, says Georgi Ivanov, a film and TV producer, it's all about business viability: "If they proposed a good business plan, why shouldn't they get the money?"

Georgi Angelov, a well-known economist, sees two reasons why Payner should not get the funds. First of all, the main measure the Bulgarian government uses to assess the absorption of EU funds is the percentage of adopted funds, not their quality. However, only well-invested funds that raise Bulgaria's competitiveness have a sustained positive effect on economic growth. According to Mr Angelov Payner isn't such a project. Moreover, the EU funding places the company (which, according to media reports, holds a virtual monopoly over the music market in the country) in a favourable position compared to others that haven't received such an outside boost. A much better investment would be to use EU money for infrastructure and for improving the business conditions in the country, says Mr Angelov.

The dubious moral message of the EU grant and Mr Angelov's concerns are not the only reasons why many questioned the logic of the grant approval (which lies in the prerogatives of Bulgarian authorities as the European Commission was quick to clarify). The controversy moved to the political stage because the president of the company, Mr Dimitrov, is a founding member of the ruling GERB party and is said to have been invited to run for MP. That raised the question whether the money would be used for politically charged chalga concerts and broadcasts ahead of this year's election in Bulgaria. This claim, made by opposition leader Sergei Stanishev, a former prime minister, was quickly denounced by Mr Dimitrov. Payner, however, has recently produced a couple of chalga songs that appear to be supportive of GERB and of the current prime minister, Boyko Borisov. One of them happens to be called "Gerber" which, as luck would have it, is both the name of a flower and the nickname for a follower of Mr Borisov's party.

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